Local government employees could be forced to work until 67 or later after union leaders and council bosses announced a rotten proposal last week.
Workers in the Unison, Unite and GMB unions would also get a smaller pension when they retire.
Around 4.6 million workers in Britain’s biggest pension scheme, including cleaners and home-helps, will be expected to continue in backbreaking jobs until they drop.
The government wants all public sector workers to “pay more, work longer, and get less”.
Union leaders have clearly conceded the last two of these demands.
Unison is keen to point out that most pension contributions will not rise from 6.5 percent, though rates for some higher-paid workers will go up.
There is also a small amount of “protection” for workers whose jobs are privatised.
But union negotiators have sacrificed almost everything else to get those sops.
“The unions and employers have kept the contributions down to stop people leaving the scheme,” said David Hughes, who is on Unison’s local government executive, speaking in a personal capacity.
“But the deal will mean far less in people’s pensions. The union has failed to defend its members.”
It is hard to know which attack is worst. First there’s “get less”. The average pension in the scheme is already just £4,200—for women it is just £2,800. Under the deal it would be even lower.
The deal means scrapping the current “final salary” scheme, where the pension is based on what
a worker is earning when they retire.
Instead workers will be stuck with a far inferior “career average” scheme, based on how much they earn over their working life.
Pension rates will be recalculated using the usually lower CPI measure of inflation—meaning less money is added to the total.
And that’s if they even manage to make it to retirement. The rotten deal also gives in over the “work longer” part of the attack.
Incredibly union leaders accept the abolition of “normal pension age”, with retirement instead tied to the state pension age.
This means that it’s not just about working until 67 or 68—there is no limit on how high it could go.
Accountancy firm Pricewater houseCoopers predicts the state pension age will soar over the next few decades.
It says babies born this year may not retire until they are as old as 77.
And it believes that even people who are in their 30s now may have to wait until they are 70.
Unison has produced publicity with examples of what pensions workers might now get. But they make the deal look better than it is.
The examples assume decades of low pay rises for low paid workers. If pay rises were higher, the old pension scheme would be far better.
The rotten pensions offer is a consequence of the unions’ failure to fully fight the government.
Instead they signed up to the Tories’ “heads of agreement”.
So they negotiated only over the details of the deal,
remaining within the overall “cost envelope” the coalition had demanded.
But there is still time. All three unions are set to hold ballots on the deal—rejection can still be won.
“Unison’s annual conference is just two weeks away,” said David Hughes. “We need to get in emergency motions now, and fight for the conference to make a recommendation to reject the deal.”